Collector – November 2019 - 18
MEDICAL DEBT & THE FDCPA:
ENFORCEMENT AND PENALTIES
* The CFPB and FTC have authority to enforce the FDCPA.
* Patients may file lawsuits to collect damages, including actual,
statutory and attorney's fees, plus court costs.
* The FDCPA is a strict liability statute, so patients don't need to
prove actual damages.
* $1,000 for each violation, plus attorney fees.
* No penalty if violation is unintentional and the result of a bona
of its collection process, credit reported
the accounts in the same manner that the
provider submitted them-as nine separate
accounts with separate dates of service, dates
of delinquency and account numbers. The
therapy patient sued.
"Rhone and her legal counsel expected us
to treat it as one debt because she went in
for one ailment," Mock said. "They thought
we should know that and combine them,
aggregating the report as one tradeline for
$540, not nine tradelines for $60 each."
A Northern District of Illinois judge
agreed, ruling in favor of the plaintiff.
"The judge misstated the facts of the case
in his own opinion letter," Mock said. "He
said that all of the [plaintiff 's therapy] dates
fell within one month, which was false. He
said we didn't credit report for three years.
That's completely false. And because we
didn't report for three years, it's inexplicable
to choose to report as nine different
tradelines for one debt. We should have
known that's not the right thing to do."
Medical Business Bureau appealed to the
U.S. Court of Appeals for the Seventh Circuit
and sought support from ACA's Industry
Advancement Program. Recognizing the
significance of the case, the program helped
fund the appeal and wrote an amicus brief.
Fortunately, the appeals court reversed the
earlier decision in February 2019, ruling in
favor of Medical Business Bureau.
"The Seventh Circuit Court basically
said Medical Business Bureau did it right,"
Scheibe Eliason said. "The court said a debt
collector does not misrepresent the character
of debt by reporting unpaid medical bills
owed to a single provider separately rather
than in the aggregate. You should report
each separate charge as a separate tradeline
as it's sent to you."
Another credit reporting challenge
collectors face is handling the flood
of frivolous disputes submitted by
unscrupulous credit repair organizations
(CROs). This practice can result in valid
payment plans being interrupted, inaccurate
credit reporting and lost revenue.
To combat fraudulent CROs' practices,
ACA member companies The CBE Group
and RGS Financial sued Lexington Law Firm
The lawsuit alleged that the defendants
solicited unsuspecting, financially troubled
consumers to sign up for credit repair
services. Upon retaining the consumers'
business, Lexington Law Firm and Progrexion
drafted, signed and mailed dispute
correspondence on behalf of consumers
without their knowledge or consent. The
letters appeared to come from the consumers
rather than a law firm or CRO.
Under the Fair Credit Reporting Act,
data furnishers are required to investigate
when a dispute is received directly from
consumers. When a dispute letter is
received from a known CRO or a known
law firm acting as a CRO, they have no
such obligation. In addition, the Fair Debt
Collection Practices Act requires collection
agencies to respond to consumers'
written requests for debt verification after
investigating the disputed debt.
To comply with statutory investigative
requirements, a debt collector or data
furnisher must investigate to determine the
accuracy of the disputed information. The
complaint alleged that Lexington Law Firm
and Progrexion "intentionally manufactured
and delivered fraudulent letters... with
the goal of circumventing the FCRA's and
FDCPA's requirements in hopes that [The
CBE Group Inc. and RGS Financial Inc.] will
delete Lexington Law clients' tradelines."
The jury in the class-action suit found
Lexington Law and Progrexion guilty of
fraud, awarding compensatory and exemplary
damages totaling approximately $2.5 million.
Cases like this are a good reminder
to review your company's policies and
"If you are still processing disputes from
a credit repair organization, talk to your
attorney and put together a policy that
outlines what you do with those disputes,"
Agencies can take steps to identify disputes
sent by CROs designed to look as though they
are coming from consumers. Such letters will
typically include identical or nearly identical
font sizes and styles, consistent postage stamp
style and a mailing class of presort first-class
Some companies have invested in bar code
scanners to read the mailer ID information
from the envelopes. Mass-mailed letters
from a CRO typically include identical
mailer ID details.
Once the disputes are positively identified
as originating from a CRO, some agencies
choose to shred them while others may keep
them as evidence, if they intend to pursue
Whichever path your agency takes, make
sure you are documenting your policies and
procedures for identifying CRO disputes and
then following those procedures.
NEED TO KNOW: CFPB FOCUS
The CFPB has expressed great interest in the
treatment of medical debt. During a 2015
field hearing, former CFPB Director Richard
Cordray said, "Medical debt amplifies many
of the problems generated by debt collection
and the credit reporting system. When
people fall ill and end up at the hospital with
unexpected bills, far too often they have
entered into a financial maze."
That same year, the bureau took action
against a medical debt collection company
Collector – November 2019
Table of Contents for the Digital Edition of Collector – November 2019
Do Your Policies Measure Up?
The Life-Changing Magic of Tidying Up Your Call Evaluations
The (Slow) Race to Clarify the TCPA
ACA’s LevelUp Leadership Experience
Lead the Next Generation Through Mentorship
Texas Tackles the TCPA
Never Give Up
A Resource Every Member Needs
Rising to the Top
Collector – November 2019 - Cover1
Collector – November 2019 - Cover2
Collector – November 2019 - 1
Collector – November 2019 - 2
Collector – November 2019 - 3
Collector – November 2019 - Upfront
Collector – November 2019 - 5
Collector – November 2019 - Industry News
Collector – November 2019 - 7
Collector – November 2019 - 8
Collector – November 2019 - 9
Collector – November 2019 - Best Practices
Collector – November 2019 - 11
Collector – November 2019 - FYI
Collector – November 2019 - 13
Collector – November 2019 - Collection Tips
Collector – November 2019 - 15
Collector – November 2019 - Do Your Policies Measure Up?
Collector – November 2019 - 17
Collector – November 2019 - 18
Collector – November 2019 - 19
Collector – November 2019 - The Life-Changing Magic of Tidying Up Your Call Evaluations
Collector – November 2019 - 21
Collector – November 2019 - 22
Collector – November 2019 - 23
Collector – November 2019 - The (Slow) Race to Clarify the TCPA
Collector – November 2019 - 25
Collector – November 2019 - 26
Collector – November 2019 - 27
Collector – November 2019 - 28
Collector – November 2019 - 29
Collector – November 2019 - 30
Collector – November 2019 - Honor Roll
Collector – November 2019 - Calendar
Collector – November 2019 - 33
Collector – November 2019 - Education Spotlight
Collector – November 2019 - 35
Collector – November 2019 - ACA’s LevelUp Leadership Experience
Collector – November 2019 - 37
Collector – November 2019 - Lead the Next Generation Through Mentorship
Collector – November 2019 - 39
Collector – November 2019 - Texas Tackles the TCPA
Collector – November 2019 - 41
Collector – November 2019 - Never Give Up
Collector – November 2019 - 43
Collector – November 2019 - A Resource Every Member Needs
Collector – November 2019 - 45
Collector – November 2019 - Rising to the Top
Collector – November 2019 - 47
Collector – November 2019 - ACA SearchPoint
Collector – November 2019 - Ad Index
Collector – November 2019 - Membership
Collector – November 2019 - 51
Collector – November 2019 - Last Word
Collector – November 2019 - Cover3
Collector – November 2019 - Cover4